Cost-Cutting Strategies for Financial Institutions

Whether it’s hard times for the economy or just some ups and downs for your own financial institution, having a tried and true system to cut costs and be more efficient is always key. From going over staff size to looking at expenses, cutting costs is not an easy task, especially with so much information and data to go over. Before you consider completely hacking things off that you may need to keep, like your financial institutions insurance policy, you should map out an efficient and considerate plan for cost-cutting. Here are a few things you can start with.

Outsource If You Can

Outsourcing is always a go-to method for trimming the fat on employee expenditures. Think of ways you can implement outsourcing at your financial institution like call center, IT, remote workers, and freelance content writers. This method is an effective way of decreasing operational costs and intricacies.

Allocate the Right Resources

Instead of putting groups of employees on the chopping block, Bank Director suggests finding ways to optimize staff at each of your locations. JPMorgan Chase and Bank of America have been conducting massive layoffs recently and will see more layoffs over time. By allocating the right resources based on a changing market demand, an inevitable run-in, you can be inspired to create cross-functional responsibilities. Your staff may wear a lot of hats, but this will only help to outfit a well-rounded employee base.

Revisit Service Levels

Resource requirements are determined by multiple factors like service levels. If there’s less time for customers to wait on the phone through your call center then there are more available agents able to help. Additionally, customer centricity is the main focus for financial institutions during normal economic times, therefore service level targets are usually set very aggressively, but companies should be smart when lowering service levels, as the impact on your bottom-line could be drastic. Finding a balance between customer centricity and cost efficiency will help to be more streamlined.

Other basic cost-cutting techniques include benchmarking costs against comparable services in the market and consolidating vendors. Long-term efficiency is not easy to come by without a corporate culture at your financial institution that values it. From the top-down, there needs to be communication and transparency to gain trust and grow reassurance.

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